Will Lowering Mortgage Rates bring out Buyers?
Will lowering Mortgage Rates bring out buyers?
I get asked this question a lot lately. My answer is: Of course lower mortgage rates will "bring-out" buyers, more-so than keeping interest rates stagnant or bumping them up a tad bit, only to bring them down a tad bit.
With slow homes sales here in San Diego, it almost seems like buyers are saying... "throw me a bone" so that I can reciprocate and apply more effort in my search and home buying process. And of course we know that the "bone" here is lower interest rates which also means smaller mortgage payments.
It does not matter what side of the political spectrum you attach yourself to, but there certainly is a distinctive atmosphere of "uncertainty" in regards to the economy and which becomes obvious that what is missing is that "feel-good" feeling of a buyer and/or buyers wanting to commit themselves to a 30-year mortgage.
What is that "uncertainty" you are talking about Oscar?... well one reason can be that the buyer is feeling insecure to the prospects of long-term employment/security. As-you-know there are many other reasons, but either way and for whatever a buyers reasoning may be - we are no doubt experiencing a shortage of buyer-commitment.
Another reason to lower the interest rates is that it will help those homeowners of the 55-plus years of age generation. More than likely they maybe thinking of downsizing. And if so, they are may also be thinking of transferring their current tax base to their new home - that is if they have not done this before. There is a lot more detail in regards to the actual "transfer of tax base" but Lowering interest rates will also mean lower mortgage payments for these 55-plus individuals who could possibly be on low and/or moderate income status.... so right here (in this scenario) there is 2-sales involved, the 55-plus sellers home and the one they are to buy.
Think about these two just mentioned sales, as we ponder... what is one of the many ways, in this current environment, that can be done to increase the quantity of home sales ? =>> Lower the Mortgage Rates !!
Oscar Castillo : BROKER - REALTOR®
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